Pegasus Heights venturing into moneylending business, proposes 86% capital reduction

• As a new entrant in the moneylending business, PHB said it will develop its customer base gradually by providing flexible financing schemes to cater for a broader range of customers.

KUALA LUMPUR (May 9): Property management company Pegasus Heights Bhd (PHB) is diversifying into the moneylending business to grow its earnings after it considered the favourable outlook of the loan market with sustained loan growth.

PHB said the group’s executive director Toh Hong Chye will spearhead and oversee the moneylending business via PHB Capital Sdn Bhd, which was incorporated in 2019 and holds a moneylending licence valid till Aug 18, 2024 and renewable every two years.

“The board expects that the moneylending business may contribute more than 25% of the total net profit of the group or cause a diversion of more than 25% of its net assets moving forward,” PHB said in a bourse filing on Monday (May 8).

PHB said it plans to extend the moneylending business to small- and medium-enterprises (SMEs) as well as the B40 segment which is underserved by licenced financial institutions.

As a new entrant in the moneylending business, PHB said it will develop its customer base gradually by providing flexible financing schemes to cater for a broader range of customers.

The group said the proposed diversification will take immediate effect upon obtaining the approval from shareholders at an extraordinary general meeting (EGM). There was no indication when the EGM would take place.

In the same announcement, PHB is proposing to reduce its share capital by RM180 million to eliminate the group's accumulated losses, which stood at RM85.06 million as of Dec 31, 2022 (FY2022), with the balance RM94.79 million to be credited to the group's retained earnings.

As at the latest practicable date on May 3, the total issued share capital of PHB stands at RM210.18 million, comprising 10.82 billion ordinary shares.

It said the capital reduction will more accurately reflect the value of the underlying assets and the financial position of the group and enhance its financial profile, with stakeholders following the elimination of the accumulated losses.

The proposed capital reduction, which is expected to be completed by the fourth quarter of 2023, also requires shareholders’ approval at an upcoming EGM, the loss-making company said.

PHB has reported a net loss of RM4.64 million for FY2022, which was an improvement from the RM19.18 million net loss in FY2021. The group has posted net loss for its annual financial year since 2017.

UOB Kay Hian Securities (M) Sdn Bhd has been appointed as the adviser for the proposals.